Occupancy license fees may be upped

November 27, 2013

SALEM - An increase is being proposed for the annual housing occupancy license fee landlords must pay per dwelling unit.

City Council's rules and ordinances committee voted 2-0 Tuesday night to recommend an increase to several fees associated with the housing occupancy license, with a proposed increase from $15 per unit to $30 per unit for the occupancy fee.

Also proposed is an increase from $30 to $60 for nonpayment of the fee. The penalty for failing to allow an inspection is proposed to increase from $50 to $100 and then from $100 to 200 for each subsequent violation.

The committee decided to hold off on increases to the appeals fee and the fee for boarding houses due to some questions.

The proposed changes to the ordinance are expected to be presented to city council on Dec. 3 for a first reading. Plans call for the committee to then hold a public meeting about the changes at 6:30 p.m. Dec. 11 at city hall, with second and third readings at a subsequent council meeting where amendments can be made from the floor.

According to current city housing code, an occupancy license is required before a dwelling can be occupied by anyone other than the owner to certify the dwelling meets the provisions of the housing code, zoning code and fire code. Issuance of a license is contingent on an inspection of the dwelling.

The issue of raising the occupancy license fee was last brought up in September 2012 when landlords spoke out against the proposal and accused the city of trying to put all the costs for the housing department on their backs and the backs of their tenants.

The previous proposal was to increase the annual housing occupancy license fee from $15 to $40 for each dwelling unit up to 25 units in a structure and to $30 for each additional unit over the 25 units per structure.

The previous ordinance also proposed to increase the penalty for nonpayment of the occupancy fee from $30 per unit to $50 per unit and to change some wording related to a requirement for annual inspections.

The increase had been suggested as a means to hire a second part-time housing inspector to keep up with the work load, which includes not only the inspection of rental units and answering complaints about rental units, but also complaints about private properties and nuisance calls dealing with items such as junk vehicles and garbage.

The department had been down to one part-time housing inspector since March 2010 when the second inspector was laid off, but the second part-time inspector was brought back in May based on income tax receipts being up. Both inspectors work 28 hours per week.

Mayor John Berlin said the theory has always been that a portion of the costs for the housing department should be covered by the fee that's charged to owners of non-owner occupied units.

"The fee charged should cover the cost of the inspections and complaint calls regarding those type of structures," he said, acknowledging that not all costs of the department involve rentals.

He said there are about 2000 rental units in the city of Salem.

Berlin said he saw no problem with the plan for an increase, noting that it's up to the committee to figure out the increase based on the percentage of the department's costs devoted to rental unit inspections and complaints.

Committee Chairman Councilman Rick Drummond said since they last talked about the fee, the mayor and the housing department have been looking at the work done and tracking how much time is devoted to rental properties. According to Drummond, they determined that 90 percent of their duties involve rental property inspections and complaints. The rest of their time is spent on non-rental property work.

Based on a proposed budget of $60,715 for 2014, the 90 percent portion would total $54,643. If that number is divided by the number of units (2,145), the fee would come to $25.47. Berlin told the committee the fee has been lower that it should have been for years, so he suggested putting the fee at $30 per unit so they don't have to revisit it every year.

Service/Safety Director Ken Kenst said the last increase to the fee was in 2004.

Drummond initially questioned whether to take a vote at the meeting, since it was poorly attended due to the weather, but Berlin said they could still send it to council for a first reading and people would have opportunity to give they opinions then and at future meetings for subsequent readings.

While discussing the other fees, committee member Councilwoman Cyndi Baronzzi Dickey questioned the fee for boarding houses, which is set at $10 per dwelling and $1 per room. They had proposed raising the fee to $30 per dwelling and $10 per room, but she asked if the inspectors do that much more work for a boarding house than they would for a four-bedroom house rented to one family. Drummond also questioned what the $1 was for and also how the inspection would be any different to justify such an increase.

They decided to hold off on that fee and the appeals fee, which they had initially talked about increasing from $50 to $100.

"We'd like to keep it affordable to appeal," Dickey said.

She also wanted to know the opinions of everybody affected by the proposed changes. Councilman Clyde Brown, the third member of the committee, did not attend the meeting, but parties present included the mayor, Council President Mickey Cope Weaver and Councilman-elect Roy Paparodis, along with a few landlords.